OPEC Unveils Global Oil Outlook to 2050, Anticipates No Peak Demand, Reports Reuters

By Alex Lawler

LONDON – OPEC has increased its projections for global oil demand in both the medium and long term in its latest annual report, pointing to growth driven primarily by India, Africa, and the Middle East, along with a gradual transition to electric vehicles and cleaner fuels.

In the 2024 World Oil Outlook released recently, the Organization of the Petroleum Exporting Countries anticipates that demand will continue to rise for a longer period compared to forecasts from other entities like BP and the International Energy Agency, which predict that oil usage will peak within this decade.

This extended period of increasing consumption represents a positive outlook for OPEC, whose twelve member countries rely on oil revenues. To support their position, OPEC indicated that there will likely be resistance to “ambitious” clean energy goals and noted that several major automotive manufacturers are scaling back their electrification plans.

OPEC’s Secretary General, Haitham Al Ghais, stated in the report’s introduction that “there is no peak oil demand on the horizon,” emphasizing that the world can only transition to new energy sources at scale when they are genuinely ready.

The organization projects that global oil demand will reach 118.9 million barrels per day (bpd) by 2045—about 2.9 million bpd higher than last year’s estimates. Looking ahead to 2050, OPEC forecasts demand will climb to 120.1 million bpd, a figure significantly higher than other industry forecasts. For comparison, BP expects oil demand to peak in 2025 and drop to 75 million bpd by 2050, while Exxon Mobil predicts demand will remain over 100 million bpd through 2050.

OPEC has called for increased investment in the oil sector, estimating a need for $17.4 trillion in expenditures through 2050, compared to last year’s estimate of $14 trillion for 2045.

In terms of medium-term outlook, OPEC has revised its demand forecasts upward, attributing this to an improving economic situation as inflation pressures ease and central banks begin to lower interest rates. According to OPEC, world demand is projected to hit 111 million bpd in 2028 and 112.3 million bpd in 2029, with the latter figure representing an increase of 800,000 bpd from prior predictions.

OPEC’s 2029 forecast exceeds the International Energy Agency’s projection by over 6 million bpd, with the IEA estimating demand will plateau at 105.6 million bpd in 2029. This discrepancy is larger than the combined production of OPEC members Kuwait and the United Arab Emirates.

Following the pandemic-induced downturn in oil demand in 2020, OPEC previously shifted its stance, predicting consumption would plateau in the late 2030s. However, it has begun to revise its forecasts upward in light of the demand recovery.

By 2050, OPEC anticipates there will be 2.9 billion vehicles on the road, an increase of 1.2 billion from 2023. Despite the growth of electric vehicles, the majority of vehicles—over 70%—will still be powered by internal combustion engines, according to the report.

While acknowledging the potential for electric vehicles to capture a larger market share, OPEC cited several ongoing challenges, including limitations in electricity infrastructure, battery manufacturing capabilities, and access to essential minerals.

Meanwhile, OPEC and its allies, collectively known as OPEC+, are implementing supply cuts to stabilize the market. OPEC’s report predicts that its share of the oil market will rise to 52% by 2050, up from 49% in 2023, as U.S. and non-OPEC+ production is expected to peak in the early 2030s.